After filing for Chapter 11 bankruptcy at the end of September, clothing store Forever 21 announced its plans to close more than 350 location Oct. 31. The Los Angeles-based retailer, founded in 1984, had some financial woes before it filed for bankruptcy.
Money.com wrote that Forever 21 initially intended on closing 178 locations, according to the company’s initial court documents. Money.com states that the final list includes 111 locations across 29 states will shutter their doors. According to Coresight Research, nearly 9,000 store closures have been announced in 2019 compared to 5,844 store closures for the full year of 2018. Coresight predicts more than 12,000 store fronts will close before the end of the year.
According to CNN Business, Forever 21 is closing stores to “create a smaller footprint.”
Forever 21 stated in a press release it intended to use the bankruptcy as a means to restructure its company. Additionally, the store plans to close its international locations in Asia and Europe but would “continue operations in Mexico and Latin America.” The company announced Oct. 8 it would close all of its locations in Canada. Customers will be able to find discounts of 10-50 percent off items while these locations undergo liquidation.
“This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21,” Linda Chang, Executive Vice President of Forever 21, Inc., said in a press release.
According to a press release, the company obtained more than $275 million in financing to continue operations as well as honor gift cards, returns, exchanges, reimbursement and sales purchases.
“The financing provided by JPMorgan and TPG Sixth Street Partners will arm Forever 21 with the capital necessary to effect critical changes in the U.S. and abroad to revitalize our brand and fuel our growth, allowing us to meet our ongoing obligations to customers, vendors and employees,” Chang said. “With support from our key landlord and vendor constituents, we are confident we will emerge as a stronger, more competitive enterprise that is better positioned to prosper for years to come, and we remain committed to delivering the fast fashion trends that our customers have come to expect from Forever 21.”